When Imagistics International (IGI ) was featured here on Aug. 26, 2002, it was trading at 18.95 a share. It has since jumped to 29.55 -- thanks to improving gross margins and better operating income, in spite of the soggy economy. That has made Imagistics -- which supplies copiers, faxes, and multifunctional machines to large corporations -- an attractive takeover candidate, says Shannon Cross of Soleil Securities, who rates the stock a buy. Japan's Ricoh (RICOY ), Sharp, and Toshiba, which supply Imagistics with customized imaging products, are known to be impressed with the company's direct-sales marketing prowess, notes Cross.
Her 12-month price target is 35, "but obviously a buyer will have to pay a premium in a buyout," she says. Cross recently raised her 2003 earnings estimate from $1.11 to $1.15 a share on sales of $620 million, and her 2004 forecast from $1.37 to $1.41 on $626.4 million. Herbert Hardt of investment firm Monness, Crespi, Hardt says "something is going on" from the way the stock has rocketed on heavy volume. CEO Marc Breslawsky couldn't be reached for comment on whether a suitor has approached him for a buyout deal.